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Self assessment, letting out jointly owned flat

(17 Posts)
UpYaKilt Fri 21-Feb-14 22:29:16

Due to the ever expanding space needed for two small children, and a very slow housing market, we are now renting a larger flat, whilst letting our own small flat. This is jointly owned by DH and I.
I've never had to fill in tax self assessment before. How do we divide the rental income for our tax returns? Is it as simple as halving the total rent and putting that figure on each return, or is it more complicated? Any tax allowances we could investigate for renting?
Thanks very much - feeling a bit clueless!

NetworkGuy Fri 21-Feb-14 23:15:14

Feel sure there would be expenses too (depending on what costs related to the rental of the flat were paid by you - eg advertising, letting agent?, etc).

It might be that there are hardly any costs involved, but splitting income equally might not be the best - surely if one earns more than the other currently, bumping up the lower income with rental income (you may need to justify it on grounds of lower income earner visits more frequently to check on flat?) would be best, as split evenly the higher could be forced into passing on more of this as taxable income.

Perhaps a friendly accountant will spot this thread and give a few tips...

YouAreTalkingRubbish Fri 21-Feb-14 23:45:21

Have you looked on MSE money Saving Website for info?

UpYaKilt Sat 22-Feb-14 07:32:16

Thanks for the advice, will look at MSE and have a think about what we've spent. From a quick look at the government website I think we have to split income equally as the flat is jointly owned?

balancingfigure Sat 22-Feb-14 07:38:13

Yes you must split equally if owned equally. You can set off mortgage interest, letting fees, insurance, repairs/maintenance, gas safety check also split equally between you.

UpYaKilt Sat 22-Feb-14 13:05:35

Ooh, gas safety check, had forgotten that
that! Had to replace the boiler and shower a couple of months ago too, think that more than covers any rent that has come in!

MrsJoeHart Sat 22-Feb-14 13:10:07

You must split it if it's equally owned. All your expenses are set against the income for the purposes of tax ie. mortgage (interest only), estate agent fees, all repairs, safety certs, expenses incurred for inspections, insurances.

specialsubject Sat 22-Feb-14 14:01:49

hope you are reading the other threads about this. Gas safety, deposit protection, legal expenses insurance...

to answer the question, you divide income and expenses by two, each report half on your SA return and tick the box saying that the income is shared. (Bizarrely they don't ask with whom!). You can deduct agents fees, repairs (not maintenance), insurances, gas safety cert cost etc. I believe that mortgage interest is also allowable but not sure on that one.

you split it in two if the place is owned in equal shares.

NetworkGuy Sat 22-Feb-14 20:07:54

"you split it in two if the place is owned in equal shares."

Was it paid for in equal shares ? While jointly owned, it might not be 50:50

NetworkGuy Sat 22-Feb-14 20:09:10

(of course it might be disadvantageous if higher income tax payable if higher proportion pushes up the taxable income of one half)

morethanpotatoprints Sat 22-Feb-14 20:25:32

What is legal expenses insurance?
Also, don't you need LL insurance or is this the same.
I think the insurances are quite heavy if you also include building insurance as well.

lotsofcheese Sat 22-Feb-14 21:08:54

I also claim mileage for inspections, stamps/stationary, phone calls, energy performance certificate, landlord registration fees, electrical safety checks, council tax & bills when unoccupied between tenancies, advertising costs, credit checks etc. Plus interest on mortgage, property manager fees, any repairs.

UpYaKilt Sat 22-Feb-14 21:12:17

Thanks again, much appreciated, although I can feel myself drowning in the paperwork already!

NetworkGuy Sun 23-Feb-14 21:32:35

Add in a charge for the time spent on the paperwork !!

(really applies more to someone letting out lots of property, where they may need to dedicate some 'office hours' to such paperwork, rather than for a single flat)

riksti Mon 24-Feb-14 08:08:52

You can't charge for your own time spent on paperwork. Unless you then put that amount on your tax return as earnings, which sort of defeats the purpose. Obviously, if you pay someone a salary to look after the rental property then that's an allowable cost but this other person will have to pay tax on their earnings.

specialsubject Mon 24-Feb-14 12:12:57

landlord insurances and what they are for. You may be able to combine these.

buildings - if it falls down or burns down.
contents - carpets, curtains, kitchen, any white goods are yours. Tenants are responsible for their property.

standard policies are for owner-occupiers. LL insurance is not that pricey but you must get the right policy.

legal expenses - in case the tenants have to be evicted, which means court and bailiffs. Sending the boys round, changing the locks will get YOU into trouble.
malicious damage - not included in all policies (Direct Line, Aviva) but essential if you get a wrong 'un in. Or they start having sex with a wrong 'un and move that person in.
rent guarantee - any tenants can lose their jobs. Bad tenants can decide to stop paying, then you have no income while the four month eviction process goes on.

specialsubject Mon 24-Feb-14 12:13:59

lotsofcheese can you claim for the bills and tax in void?

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